By Cassie Werber
LONDON--Crude oil futures headed down Friday as a selloff
continued, sending U.S. contract to its lowest point since early
February, as seasonal lows also took effect.
Summer is a time of lower demand from refineries as they carry
out maintenance, according to analysts at JBC Energy. Profit
margins for products are also low at the moment, leading to reduced
refinery intakes, they said.
Moreover, there are plenty of oil stocks in the system.
"The oil market looks fairly oversupplied following the ample
crude stocks in Europe and the U.S.," said Myrto Sokou, senior
research analyst at Sucden Research.
In July, Brent futures had their worst monthly performance since
April 2013, falling more than $6 during the month, she said. Brent
September crude on ICE was down 0.6% at $105.42 a barrel.
WTI crude on the Nymex exchange was down 0.89% at $97.28 a
barrel, its lowest since Feb. 7. Nymex WTI lost $2.10 a barrel
during yesterday's trading with the intraday price hitting its
lowest level since mid-March.
Investors are broadly brushing off the geopolitical concerns
that continue to wash around the world. Oil's reaction to sanctions
imposed on Russia this week by the European Union and U.S. was
muted, with investors waiting to see how the news will affect the
global economy more generally.
Despite stronger data from the U.S. on Thursday, some analysts
believe the Russian concerns may come back to haunt oil
investors.
"Russia sanctions may be the tipping point for the euro-zone
economy sending it into deflation but it may also be the final
straw that breaks the camel's back of confidence for U.S. stock
market investors," said David Hufton of PVM.
Nonfarm payroll data, a marker of how well the U.S. economy is
doing in terms of job creation, are due later Friday.
Recently the ICE's gas oil contract for August delivery was down
$1.75 at $885.25 a metric ton, while Nymex gasoline for September
delivery was down 158 points at $2.7814 a gallon.
Write to Cassie Werber at cassie.werber@wsj.com
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